21895: Severe reply to Lyall and Benson on Rice (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: Constantin Severe <csevere@hotmail.com>

       Other things being equal, when a price of a commodity(in this case
rice) rises significantly it should attract new entrants into the market. In
Haiti for some reason this has not been the case. I haven't seen any good
figures on what Haiti's domestic rice production capacity is, but the steady
rise in the value of dollar versus the gourde over the last few years should
have been good for the Haitian rice farmer, because it made the price of
imported rice more expensive. On the other hand, whatever comparative
advantage the Haitian farmer may have gained went out the window with
increased fuel costs for transporting their produce to market.
   While the big American rice farmers in La. and Fl. have come to dominate
Haiti through a combination of low production costs and inventive ways
around already much reducted Haitian Tariffs, they have pushed the price of
rice down making it more affordable for city dwellers.

                                                           Constantin

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